Organisational Change Management Volume 2

Some Ways to Handle Complacency

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General Comments

. Complacency creates a false sense of security

. It should be one of the roles of top management to shake up parts of the organisation that have grown staid or comfortable. Remember:

"...Change programs are easier when things are bad. When things improve, people relax and think, we're there..."

John Fletcher as quoted by Narelle Hooper, 2005a

. The higher the level of complacency, the bolder and risky the action and leadership required to create the sense of urgency, with the aim of reversing organisational drift and restoring cultural vitality

Some Strategies to create a sense of urgency

. Manufacture or create a crisis, eg financial, such as clean up the balance sheet and create a huge loss for the quarter, let an error blow out, expose the competitive disadvantages of the organisation, etc.

. It is better to create a crisis than to wait for one to occur, as waiting may ultimately mean less room to manoeuvre with limited resources

. Eliminate excesses eg luxury hotel accommodation, gourmet dining rooms, membership of expensive clubs, first-class travel, up-market offices, etc.For example, Anderson, when he joined BHP as its senior manager, sold all the corporate jets and made executives travel on commercial airlines

. Set high targets which usual practices cannot meet. Set ambitious goals (stretch goals) that upset the status quo, eg high targets of productivity, revenue, income and reduce cycle time. For instance, in the 1980s Jack Welch announced at GE that all business units

"...Become no 1 or 2 in the marketplace within 12 months or be disbanded..."

Jack Welch as quoted by Janet Lowe, 1998

This has often being described as the "fix, close or sell"concept.

Yet, at that stage, GE's net income was up 9% on the previous year to almost $1.7 billion; only 9 other Fortune 500 organisations earning more. Everyone was dumbfounded when Welch demanded change before it was too late

Around 15 years later this concept was reversed from being no. 1 or 2 in the market place to having a market share of less than 10%. As the current situation was holding GE back and stifling growth opportunities, it was felt that GE needed to redefine market share. Thus, GE changed its fundamental concept of 15 years as a way to expand into new markets. This change in mindset was the basis for sales growing from $US70 billion in 1995 to $US130 billion in 2000.

. Stop evaluating sub-unit performance on narrow, functional goals and have staff accountable for broader goals of performance

. Have regular dialogue (eg weekly) with stakeholders such as dissatisfied customers, unhappy suppliers and disgruntled shareholders

. Encourage and lead open discussions of organisational problems, ie stop senior management "happy talk"and use consultants to find out the facts and force honest discussions into management meetings

. Share more information with staff about customer and financial performance, especially that which

. demonstrates competitive weaknesses

. Bombard staff with the idea of opportunities and rewards that the organisation is not currently capable of providing

. When an issue is raised and generates a sense of urgency, the guaranteed first line of defence is

"... we need a plan... more direction...more resources..."

Managers must not take this bait, ie not give the answers. Managers must provide the truth, a sense of urgency and enough productive stress to produce the catalyst for a creative, effective response

. Remove obstructions, including staff

. Move corporate headquarters into a building that looks more like a battle command center

. Make 50 percent of the salaries of the top officers based on tough product-quality targets for the whole organisation

. Expose managers to a major comptetive weakness

. Allow errors to compound instead of being corrected at the last-minute

. Insist that more people at lower levels be held accountable for broad measures of business performance

. Send more data about customer satisfaction and financial performance to more employees, especially information that demonstrates weaknesses vis-a-vis the competition

. Insist that staff talk to dissatisfied customers, unhappy suppliers and disgruntled shareholders

. Put more honest discussions of the firm's problems in company newspapers and senior management speeches

(sources: John Kotter, 1996 a & b; Joseph Boyett et al, 1998; Jack Welch et al, 2001)

 

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